Comment I made to a scathing Taibbi article about Mitt Romney
It isn't just a matter of firing a few deadwood employees. The real issue amounts to the Mitt-types taking out huge loans against a company's assets, then taking a nice slice of the loan and putting in their pockets, and leaving the company to die a slow death from financial asphyxiation. Reminds me of chainsawing off rhinoceros horns for the ivory, and leaving the creatures to die. From Taibbi's article:
It isn't just a matter of firing a few deadwood employees. The real issue amounts to the Mitt-types taking out huge loans against a company's assets, then taking a nice slice of the loan and putting in their pockets, and leaving the company to die a slow death from financial asphyxiation. Reminds me of chainsawing off rhinoceros horns for the ivory, and leaving the creatures to die. From Taibbi's article:
"Now your troubled firm – let's say you make tricycles in Alabama – has been taken over by a bunch of slick Wall Street dudes who kicked in as little as five percent as a down payment. So in addition to whatever problems you had before, Tricycle Inc. now owes Goldman or Citigroup $350 million. With all that new debt service to pay, the company's bottom line is suddenly untenable: You almost have to start firing people immediately just to get your costs down to a manageable level.
"That interest," says Lynn Turner, former chief accountant of the Securities and Exchange Commission, "just sucks the profit out of the company.
"That interest," says Lynn Turner, former chief accountant of the Securities and Exchange Commission, "just sucks the profit out of the company.
Read more: http://www.rollingstone.com/politics/news/greed-and-debt-the-true-story-of-mitt-romney-and-bain-capital-20120829#ixzz252YkPGB6
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